# CSB and HBS Partner to Show How ROSI™ and IWA Methodologies Can Drive Impact Valuation Decisions

Center for Sustainable Business

October 20, 2021 ![Report Photo ](/sites/default/files/styles/246w/public/assets/images/report%20photo.png?itok=_3iFr149) The adoption of sustainable practices increasingly drives better management and financial performance, and companies with strong ESG performance are being rewarded by stakeholders. However, the risk of “impact-washing” is growing as companies race to keep up with the exponential popularity of ESG and impact.

CSB partnered with the Harvard Business School’s [Impact-Weighted Accounts](https://www.hbs.edu/impact-weighted-accounts/Pages/default.aspx) project to provide managers a common analytical lens for evaluating the business and stakeholder outcomes of sustainable operations. The publication “[Complementary Solutions for Holistic Impact Valuation: Return on Sustainable Investment (ROSI™) and Impact-Weighted Accounting (IWA)](https://www.stern.nyu.edu/sites/default/files/assets/documents/ROSI%20IWA%20Publication.pdf)” describes how these complementary impact monetization methodologies together can offer a comprehensive assessment of financial, social, and environmental impact using the common language of currency.

The [ROSI](https://www.stern.nyu.edu/experience-stern/about/departments-centers-initiatives/centers-of-research/center-sustainable-business/research/return-sustainability-investment-rosi)[™](https://www.stern.nyu.edu/sites/default/files/assets/documents/ROSI%20IWA%20Publication.pdf) framework monetizes internalities of business impacts and demonstrates the financial benefits to conducting business responsibly. IWA is a tool that demonstrates the monetary value created or eroded for stakeholders and the environment, proving that these business practices also create positive benefits for the environment, workforce, and customers. **Both frameworks are rooted in valuation, which is a familiar tool for managers and creates comparable and digestible information.**

Using the CSB’s ROSI framework together with the IWA methodology, companies can improve internal management systems and performance as well as communicate concrete, decision-useful information to investors. For example, for the automotive industry, reducing the number of product recalls could save auto companies over $550 million while avoiding $675 million in negative externalities to customer health and safety.

Excerpt: “By developing frameworks that assist managers and investors to assess the financial impact of sustainability-related issues, ROSI™ and IWA help companies improve the effectiveness of their decision making and investments.”